Residential Geothermal Heat Pump Rebate Program

August 16, 2010


Note: Current funding is fully reserved and the program is no longer accepting applications. The Minnesota Office of Energy Security (OES) offers rebates for the installation of qualifying ground-source heat pumps at existing primary residences within the state. Installations undertaken as part of new construction are not eligible for a rebate. The rebate is calculated as 35% of the installed system cost up to a maximum of $10,000. Eligible costs include those associated with desuperheater equipment, but do not include equipment and labor costs for auxiliary heating equipment. The rebate may not exceed the total cost of the system minus federal, utility, or other incentives. In order to qualify for a rebate, the equipment must have been installed on or after July 1, 2009. For systems that begin construction after February 16, 2010 the applicant must submit the program application prior to beginning system construction in order to reserve rebate funds. Projects must be completed within 180 days of the date the application is approved. Only systems that use a closed-loop system to provide space heating and cooling -- including both forced air and hydronic heating systems -- are eligible for rebates. Open-loop systems, direct exchange systems, pond-loop heat exchangers, and systems connected to hot tubs or swimming pools are not eligible. In addition, in order to qualify for a rebate the system must be new; Energy Star listed under criteria established after December 1, 2009; and have a five-year equipment and installation warranty. Further requirements exist for certain aspects of the system, including the piping, heat transfer fluids, and system installation. System size is generally limited to 5.5 tons; however, the OES will accept conditional applications for larger systems that otherwise meet the program requirements. Funding for conditional applications will ultimately be determined by the U.S. Department of Energy (DOE). The program is funded by the American Recovery and Reinvestment Act (ARRA), thus all installations are subject to compliance and reporting requirements associated with the use of ARRA funds. Installations may be subject to inspection by OES personnel to verify compliance with program rules. The program application contains a detailed list of reporting and implementation standards for prospective applicants.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Minnesota
Incentive Type: Rebate Program
Web Site:
Administrator: Minnesota Department of Commerce
Start Date:
Eligible Renewable/Other Technologies:
  • Geothermal Heat Pumps
Incentive Amount: 35% of system cost
Maximum Incentive: $10,000
Eligible System Size: Up to 5.5 tons; conditional applications for larger systems may be submitted
Equipment Requirements: Equipment must be new; Energy Star listed under criteria established after December 1, 2009; and equipped with a 5-year warranty; other component requirements also apply
Installation Requirements: Installations must be performed by a licensed and bonded contractor


Name: Energy Information Center
Organization: Minnesota Department of Commerce
Address: 85 7th Place East
St. Paul MN 55101-2198
Phone: (800) 657-3710

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.